The Consumer Rights Act 2015 (the Act’) requires all letting agents in England and Wales to publicise details of their fees and provide a description of the fee that is ...
...‘sufficient to enable a person who is liable to pay it to understand the service or cost that is covered by the fee or the purpose for which it is imposed’ (s. 83(4)(a)). The local weights and measures authority may issue a fixed penalty notice of up to £5,000 for failure to comply with the Act. London Borough of Camden v Foxtons Ltd is the first appeal under this statutory regime to be considered by the Upper Tribunal (‘UT”).
LB Camden (‘LBC’), the local weights and measures authority, was concerned about Foxtons displaying a one-off ‘administration charge’ of £420 without a sufficient description of what services were included in the fee. Following a series of exchanges with the company and the issue of Notices of Intent in relation to three branches in the borough and Foxtons’ website, LBC issued Final Notices, confirming financial penalties totalling £20,000. Prior to the issue of the Final Notice, Foxtons had changed the wording of its scale of charges, but LBC took the view that the company still breached the requirements of the Act.
The First-Tier Tribunal allowed Foxtons’ appeal to the extent that it reduced the total penalty to £12,000 on the basis that the revised wording used by Foxtons following the Notices of Intent complied with the statutory regime.
The UT allowed LBC’s appeal. Foxtons’ reworded text described the £420 administration fee as ‘a fixed cost fee that can cover a variety of works, depending on the individual circumstances of each tenancy, including but not limited to conducting viewings, negotiating the tenancy, verifying references and drawing up contracts.’ The UT held that the phrase ‘can cover’ encompassed the idea of ‘might not cover’ and was therefore not sufficiently clear to indicate that there would be no services incurring a further charge. The failure of the First-Tier Tribunal to appreciate the implication of the wording amounted to an error of law.
The UT gave credit for Foxtons’ attempt, albeit unsuccessful, to design compliant wording. This credit merited a 25% discount or £500 in respect of each of the four breaches. The total penalty, therefore, was £18,000.
Barbara Zeitler / 13th Oct 2017
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